In January this year, the Indian government allowed for significant amendments to be made to the country’s ‘Tariff Policy’, which included increasing Renewable Purchase Obligation (RPO) for solar power to 8% by March 2022. Under the RPO scheme, Indian power distribution companies (discoms) are mandated to make a purchase of a stipulated amount of renewable energy. Previously, the RPO stood at a mere 3%. Tarun Kapoor, the Joint Secretary of the Ministry of New and Renewable Energy (MNRE) announced last November that the raising of the RPO limit was becoming a necessity and called it “the single most important regulatory and policy mechanism of government of India to drive solar”. This indeed looks like one of the more important developments in the renewable energy sector in recent times.

Also part of the policy revision is a compulsory procurement and purchase of renewable capacity by coal-fired or lignite-based thermal plants, a move that can be seen as attempt to bring an increasing number of industries in harmony with renewable energy. To support solar grid expansion, the government will also be carrying out ancillary services. All of this is certainly good news for the solar power sector in India and aims to support the government’s Ujwal Discom Assurance Yojana (UDAY), a policy targeted at overhauling the country’s distressed discoms. It also helps the energy minister Piyush Goyal’s and prime minister Narendra Modi’s vision of 24*7 electricity in the entire country, the remote areas being well untouched of electricity. However, this target would also involve deploying a huge number of coal-fired plants apart from the increased solar capacity.

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